HARD-UP households will pay less for their energy bills this winter thanks to a £40million support package.
EDF will roll back standing charges to pre-energy crisis levels for its most vulnerable customers.
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A standing charge is a fixed amount that customers must pay on their energy bill regardless of how much gas and electricity they use.
The daily standing charges on a household energy bill have increased by 107% and 8.2% on gas for a direct debit customer since April 2021.
At the same time, current schemes like the warm home discount haven’t increased since before the energy crisis, despite energy bills being almost double.
However, EDF has now made a commitment to help struggling households by boosting its support for those in need by more than £15million.
Around £7.5million will be spent directly on rolling back standing charges for at least 260,000 warm home discount customers to their pre-crisis level for the first quarter of 2024.
The financial support will be applied to eligible customers’ accounts as a £30 credit in December.
This means standing charges will effectively be an average of 56p instead of 87p per day, covering the period from January through to March.
Additional funding will also be made available for its customer support fund, which provides debt relief and energy-efficient white goods to those in need.
What is a standing charge?
The charges make up around £300 of most households’ yearly energy bills.
Despite energy bills dropping by £426 a year at the start of July, the daily standing charges remained the same.
MoneySavingExpert and Martin Lewis have been campaigning for these charges to be lowered and Martin has previously described them as a “moral hazard”.
Speaking in June, he said: “It is outrageous that people have to pay £300/yr just for the facility of having gas and electricity even if they use none.”
He added: “Keeping the standing charge high means lower users can save proportionately less and less by reducing usage – that disempowers them.”
The current standard charges for a typical household are as follows:
- 7.51p per kilowatt hour (p/kWh) for gas
- 30.11p/kWh for electricity
- A standing charge of 29.11p per day for gas
- A standing charge of 52.97p per day for electricity
But from October 1, Ofgem will introduce the following new rates:
- 6.89p per kilowatt hour (p/kWh) for gas
- 27.35p/kWh for electricity
- A standing charge of 29.62p per day for gas
- A standing charge of 53.37p per day for electricity
What are other suppliers doing?
Not every supplier will be doing the same so it is best to check with your provider if they are offering any extra support.
For example, Utilita Energy is one of the suppliers who have no standing charge and this means that you won’t pay anything if you don’t use any energy.
Octopus has also recently announced it is taking a stand in the battle against standing charges with a £40m support package.
Dual fuel customers on Octopus’s standard variable tariff will receive a 4% reduction in standing charges compared to Ofgem’s price cap.
British Gas’ website states that they do charge customers a standing charge which will be as per the rates above.
Ovo has joined calls for the overhaul of standing charges and confirmed that it will not be passing on the increase as of October 1.
How can I get help with my energy bills?
There are other ways you can get help with your bills this winter.
A number of organisations are offering free cash to households that are struggling.
The Household Support Fund (HSF) is a pot of money that has been shared between local councils to help its most needy residents.
The cash can be issued as a direct payment or in the form of vouchers, and some councils may give help specifically with energy bills.
Each local council can decide its own eligibility criteria, but usually, help is handed out to those on a low income or benefits.
If you would like to know what you may be entitled to contact your local council.
If you are unsure who this is you can find out why using the government’s council locator tool on the website.
Customers on traditional or smart prepayment meters can usually get help in the way of “emergency credit” if they have no money left on their meter.
Do bear in mind that this is not free money, and it will have to be paid back eventually.
A number of providers offer an emergency credit option, including Scottish Power, Octopus Energy and British Gas.
But the amounts they offer differ, so you should contact yours to find out what you can get.
It might also be possible to get one-off top-up vouchers for your meter.
The help comes via the Fuel Bank Foundation charity and is offered through local organisations such as food banks and Citizens Advice.
Remember if you are struggling with your bills contact your supplier as soon as possible as they will be able to offer some advice.
